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TAX INCREMENT INTERFUND LOANS <br /> By: Diana Lund, Finance Officer <br /> <br />Background: <br /> <br />As part of the 2002 tax bill the State mandated that any inter-fund loan or advance <br />between TIF funds and other City funds, that are to be reimbursed at a later date by tax <br />increment, a resolution needed to be adopted for every transaction that occurred. This <br />bill went into effect on. August 1,2001. Council adopted a resolution at its regular <br />meeting of July 24, 2001, stating all inter-fund loan transactions that had occurred prior <br />to this date, could be brought into compliance with the issuance of a single resolution. A <br />copy of the 2001 resolution is attached. - <br /> <br />With the finish of the 2004 tax bill, changes were made regarding the handling of inter- <br />fund loans. Cities are now allowed to pass one general resolution that will authorize <br />inter-fund loans or advances. Each loan or advance will still require a separate written <br />agreement setting out its tem-~s, for example, in the development agreement, but the City <br />Council will not need to pass a separate resolution, if a general resolution is in place <br />permitting the inter-fund loan. J_n conclusion, by having the general resolution in place <br />this only states that inter-fund loans or advances are allowed, but it does not authorize <br />any project or transfer of funds until City Council authorizes such. <br /> <br />Any interest rates to be charged on inter-fund loans or advances will be determined as a <br />fixed rate at the time the loan is made. <br /> <br />Staff Recommendation: <br /> <br />Consider adoption of resolution authorizing a General Resolution for TiF lx~ter-fu.nd <br />loans, or Advances. <br /> <br />Council Action: <br /> <br />Adopt Resolution #03-06-XXX authorizing a General Resolution for TIF Inter-fund <br />loans, or advances. <br /> <br />-125- <br /> <br /> <br />